Vodafone bulks up with Lebara Mobile purchase

SUPRATIM ADHIKARI
September 14, 2016
The Australian
Vodafone Hutchinson Australia has picked up an extra 130,000 mobile customers by acquiring the local operations of Britain’s Lebara Mobile, in what could be a precursor to Vodafone launching a budget brand in Australia.
Lebara has been a Mobile Virtual Network Operator on Vodafone’s network since 2009.
The move will see Vodafone take over Lebara’s mobile base, and it will get the right to use the Lebara brand in Australia for five years.
Vodafone chief strategy officer Dan Lloyd said that Lebara’s niche offering in the market was a good fit for the telco as it looked to leverage the strength of its network and drive competition in the mobile market.
“We don’t have a concerted strategy with regards to budget brand just yet, but this (the Lebara deal) does create options for us,” Mr Lloyd told The Australian.
It’s the second major move by Vodafone to flex its muscles in the MVNO space, following its coup last year in convincing TPG Telecom to move its mobile customer base from Optus to Vodafone.
Lebara may not be quite as big a fish as TPG, but Mr Lloyd said that its appeal among the Australian migrant community as a prepaid option was still pretty strong.
Headquartered in Britain, Lebara is best known in Australia for its low-cost, prepaid calling cards, but it has been diversifying its service offering in recent years.
Last year the virtual telco launched an OTT video content delivery platform called Lebara Play.
While it has been active for some time in Australia, the region has in recent times become non-core to the overall Lebara business. It’s understood that with an IPO looming, Lebara saw the Australian business as an isolated offshoot.
Vodafone and Lebara had been considering the deal for the better part of this year.
Further negotiations are likely as the companies work out the final fate of Lebara’s Lebara Play delivery platform.
The streaming service — which provides video content in foreign languages — will continue to be operated by Lebara for the time being.
“Lebara will continue to offer that service, but we are in talks to see if we can resell it in the future,” Mr Lloyd said.
While calling overseas using postpaid services has become relatively less expensive in recent times, Mr Lloyd said that there was still a surprisingly healthy lower-end market focused on international calling and texting.
“A lot of people said that there was no future for this market but it’s still here and it’s still active,” he said.
The same could also apply to the MVNO market, which was until recently said to be on borrowed time.
However, the ecosystem of operators is relatively healthy, buoyed by Telstra and Vodafone providing wholesale access to their 4G networks.
“It has proved to be a very resilient market and it serves niche markets in a way that the big operators can’t,” Mr Lloyd said.
Vodafone is aiming to hang on to most of Lebara’s back office staff and Lebara products will continue to be sold through existing retail partners, including Coles and Woolworths